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DECREE

ON INVESTMENT ACTIVITIES IN THE POST AND TELECOMMUNICATIONS SECTOR

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the November 29, 2005 Investment Law;

Pursuant to the May 22, 2002 Ordinance on Post and Telecommunications;

At the proposal of the Minister of Information and Communication,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree provides for conditions on direct investment in various forms in the post and telecommunications sector for business purposes.

Article 2. Subjects of application

This Decree applies to domestic and foreign investors making investment activities in the post and telecommunications sector in the Vietnamese territory; and organizations and individuals involved in investment activities in the post and telecommunications sector.

Article 3. Interpretation of terms

In this Decree, the terms below are construed as follows:

1. "Investment in the post domain" includes investment in the provision of delivery services.

2. "Investment in the telecommunications domain" includes investment in the establishment of infrastructure for telecommunications networks, Internet and signal transmission, and investment in the provision of telecommunications and Internet services.

3. "Forms of direct investment in the post and telecommunications sector" cover investment forms specified in Article 21 of Investment Law No. 59/2005/QH11 dated November 29, 2005.

4. "Licensed telecommunications service providers in Vietnam" are enterprises that have been granted telecommunications licenses by the Ministry of information and communication.

Article 4. Investment procedures

1. The competence to grant investment certificates, agencies receiving dossiers of investment projects and investment registration procedures comply with legal provisions on investment.

2. Foreign-invested economic organizations, regardless of their capital amount, when making investment in the post and telecommunications sector, shall formulate investment projects and observe legal provisions on investment and this Decree.

3. Investment projects in the post and telecommunications sector subject to verification for the grant of investment certificates include:

a) Foreign-invested projects, regardless of their investment capital amount.

b) Domestic investment projects to establish network infrastructure for the provision of telecommunications services, regardless of their investment capital amount.

c) Domestic investment projects to provide delivery services and telecommunications services without network infrastructure, capitalized at VND 300 (three hundred) billion or more.

4. Competence to verify investment projects:

a) Provincial-level information and Communication Services shall verify investment projects to provide delivery services and telecommunications services without network infrastructure within one province or centrally run city which are subject to verification.

b) The Ministry of Information and Communication shall verify investment projects other than those specified at Point a of this Clause.

5. Contents and the order of verification of investment projects comply with legal provisions on investment, this Decree and specialized laws.

Article 5. Investment duration

The operation duration of investment projects complies with legal provisions on investment.

If the operation duration of an investment project is longer than that prescribed by law for a specialized license; investors shall carry out procedures for competent state agencies to consider the renewal or extension of specialized licenses as prescribed.

Article 6. Supervision of investment projects

1. The transfer of investment projects under the Investment Law does not include the include the transfer of specialized investment license delivery, telecommunications, the Internet and signal transmission.

2. The transfer of foreign-owned capital must comply with the provisions of this Decree and Vietnam's commitments upon accession to the World Trade Organization (WTO) in relevant sectors.

3. In case of adjustment of investment projects, capital transfer, suspension or termination of operation of investment projects, investors shall observe legal provisions on investment and report such to the Ministry of Information Communication for the latter to consider the renewal or withdrawal of specialized licenses as prescribed by the law on post and telecommunications.

Article 7. Application of laws

1. If there are any differences between the provisions of this Decree and other decrees on a matter related to investment in the post and telecommunications sector, the provisions of this Decree will prevail.

2. If treaties, agreements or other international documents which have been concluded by competent agencies or organizations of the Socialist Republic of Vietnam contain provisions different from those prescribed in this Decree, the provisions of these international documents will prevail.

Chapter II

CONDITIONS ON INVESTMENT IN THE TELECOMMUNICATIONS DOMAIN

Article 8. Investment projects to establish network infrastructure for the provision of telecommunications services

Investment projects to establish network infrastructure for the provision of telecommunications services must satisfy the following conditions:

1. General conditions:

a) Being in line with Vietnam's strategy, planning and plan on telecommunications development.

b) Being conformable with national standards and technical regulations on telecommunications, planning on allocation of information resources and relevant provisions of specialized laws.

2. Conditions on entities:

a) Domestic investors:

- Being state enterprises or enterprises in which the State holds a dominant share.

- For an investment project of several domestic investors, at least one of these investors must be a state enterprise or an enterprise in which the State holds a dominant share and the portion of capital held by that investor accounts for at least 51% of the project's total investment capital.

b) Foreign investors:

- Forming joint ventures or associating with domestic investors licensed to establish telecommunications network infrastructure and provide telecommunications services in Vietnam.

- Contributing a portion of capital in conformity with Vietnams WTO commitments, unless current legal documents of Vietnam set more favorable conditions.

3. Minimum registered capital:

a) In order to be licensed, an investment project to establish public telecommunications network infrastructure within a province or centrally run city must have a minimum registered capital of VND 160 (one hundred and sixty) billion.

b) In order to be licensed, an investment project to establish public telecommunications network infrastructure nationwide must have a minimum registered capital of VND 1,600 (one thousand six hundred) billion.

Article 9. Investment projects to provide telecommunications services without network infrastructure

Investment projects on the provision of telecommunications services without network infrastructure must satisfy the following conditions:

1. Domestic projects:

a) Being lawfully established enterprises of all economic sectors.

b) For a project of several domestic investors, at least one of these investors must contribute at least 30% of the project's total investment capital.

2. Foreign-invested projects:

a) Within the first three years after Vietnam's accession to the WTO, foreign investors wising to provide basic telecommunications services or Internet access services shall form joint ventures with at least a licensed telecommunications service provider in Vietnam; the portion of capital contributed by licensed telecommunication service providers in Vietnam must account for at least 49% of the project's total investment capital.

b) The proportion of capital contributed by foreign investors must conform with Vietnam's WTO commitments, unless current legal documents of Vietnam set more favorable conditions.

Article 10. Telecommunications licenses

1. After being granted an investment certificate or investment registration certificate, the investor shall formulate a scheme for application for a telecommunications license.

2. The order, procedures and competence to grant telecommunications licenses comply with the specialized law on telecommunications.

3. Investors will be granted telecommunications licenses if their schemes satisfy the following conditions:

a) Conforming to the investment project approved by a competent state management agency.

b) Complying with the provisions of specialized laws regarding the licensing of information resources, standards, technical regulations, service quality, charge rates, connection, assurance of information security.

c) If the scheme of application for a telecommunications license does not conform to the investment project approved by a competent state management agency or fails to satisfy the provisions of specialized laws, the Ministry of Information and Communication shall refuse to grant a telecommunications license.

Chapter III

INVESTMENT CONDITIONS IN THE POST SECTOR

Article 11. Investment projects to provide delivery services

Investment projects to provide delivery services must satisfy the following conditions:

1. Conditions on entities:

a) For investment projects which are not associated with the establishment of an economic organization, investors must be enterprises set up under Vietnam's laws and having business registration certificates or investment certificates for the provision of postal services and delivery services.

b) For investment projects associated with the establishment of an economic organization, domestic and foreign investors that are organizations or individuals shall carry out procedures for the establishment of an economic organization in accordance with law.

c) Foreign partners in investment projects:

- Being lawful delivery service enterprises in their countries of origin, for investment projects to provide worldwide delivery services.

- Being lawful delivery service enterprises in their countries of origin with a delivery network within the scope of coordination, for investment projects to provide worldwide delivery services.

2. Portion of contributed capital

a) Domestic investors may set up economic organizations with 100% domestic capital for the provision of delivery services.

b) Domestic and foreign investors may cooperate with one another in direct investment in various forms to provide delivery services, with the portion of foreign capital accounting for up to 51% and complying with the relevant treaty to which Vietnam is a contracting party.

c) Foreign investors may set up joint ventures with domestic investors with the portion of foreign capital accounting for more than 51% or set up economic organizations with 100% of foreign capital from January 11, 2012.

Article 12. Postal licenses

1. After being granted a business registration certificate or investment certificate, investors shall carry out the following jobs:

a) Notify their business activities to competent state management agencies, for investment projects to provide delivery services.

b) Request competent state management agencies to grant postal licenses as prescribed by the specialized law on post, for investment projects to provide mail delivery services.

c) Make registration with competent state management agencies as prescribed by relevant laws, for domestic investors acting as mail delivery agents for foreign delivery organizations.

2. The order, procedures and competence to grant postal licenses comply with specialized laws on post.

3. Postal licenses will be granted if the schemes of application satisfy the following conditions:

a) Conforming to investment projects approved by competent state management agencies.

b) Complying with the provisions of the specialized law on post.

c) If the scheme of application for postal licenses does not conform to the contents of the investment project approved by a competent state management agency and)or fails to satisfy the provisions of the specialized law, the Ministry of Information and Communication shall refuse to grant postal licenses.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 13. Effect

This Decree takes effect 15 days after its publication in "CONG BAO".

Article 14. Organization of implementation

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, provincial-level Peoples Committee presidents, and concerned organizations and individuals shall implement this Decree.